BNY has rolled out a tokenized deposit service that allows clients to move funds using blockchain infrastructure, marking another step by a major global bank into digital assets.
Key Takeaways:
- BNY launched tokenized deposits to allow on-chain transfers while keeping funds within the regulated banking system.
- The service supports faster, 24/7 settlement and programmable transactions for collateral and margin use cases.
- The move reflects growing institutional adoption of tokenization by major global banks.
In an announcement published Friday, BNY said it has facilitated an on-chain mirrored representation of client deposit balances on its Digital Assets platform.
The initiative marks the first phase of the bank’s strategy to tokenize deposits, starting with collateral and margin workflow use cases.
BNY Says Tokenized Deposits Mirror Bank Balances On-chain
The tokenized deposits operate as digital book entries that reflect clients’ existing demand deposit claims against the bank.
While balances are mirrored on-chain, they continue to be recorded on BNY’s traditional systems, ensuring regulatory, accounting, and reporting consistency.
The capability runs on BNY’s private, permissioned blockchain and is governed by the bank’s existing risk and compliance frameworks.
BNY said the launch is designed to support programmable, near-real-time cash movement as financial markets shift toward always-on operating models.
Tokenized deposits could help reduce settlement friction, improve liquidity efficiency, and allow rules-based payments across institutional workflows.
Early participants include Intercontinental Exchange, Citadel Securities, DRW Holdings, Baillie Gifford, Circle, Ripple Prime, and several other financial and digital asset firms.
ICE said it plans to support tokenized deposits across its clearinghouses as it prepares for 24/7 trading and settlement.
In September, BNY announced it is making strides towards offering custody services for Bitcoin and Ether, specifically for its exchange-traded product (ETP) clients.
Earlier this year, the SEC’s Office of the Chief Accountant reportedly reviewed BNY Mellon’s approach to crypto custody.
The SEC didn’t object to BNY Mellon’s decision not to include these crypto assets as liabilities on its balance sheet.
The review was key because of the SEC’s SAB 121 rule, which requires banks to account for crypto assets they safeguard as both a liability and an asset on their balance sheets.
BNY Mellon’s unique case with ETPs, however, which bypasses this requirement.
RWA Tokenization Gains Momentum
Last month, Libeara, the blockchain infrastructure platform backed by Standard Chartered’s venture arm SC Ventures, rolled out a new tokenized gold investment fund in Singapore, bringing one of the world’s oldest safe-haven assets onto digital rails.
The fund, launched in partnership with FundBridge Capital, allows professional investors to gain exposure to gold through blockchain-based tokens issued on Libeara’s ledger.
In a recent research, Web3 digital property firm Animoca Brands said that tokenization of RWAs could unlock a $400 trillion traditional finance market.
Animoca researchers Andrew Ho and Ming Ruan said the global market for private credit, treasury debt, commodities, stocks, alternative funds, and bonds represents a vast runway for growth.
“The estimated $400 trillion addressable TradFi market underscores the potential growth runway for RWA tokenization,” they wrote.
Meanwhile, according to the 2025 Skynet RWA Security Report, the market for tokenized RWAs could grow to $16 trillion by 2030.
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